Exhibit 14
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PARAGON TECHNOLOGIES, INC.
CODE OF BUSINESS CONDUCT AND ETHICS
Introduction
This Code of Business Conduct and Ethics ("Code") provides a general
statement of the expectations of Paragon Technologies, Inc. ("Company")
regarding the ethical standards that each director, officer, and employee should
adhere to while acting on behalf of the Company. It does not cover every issue
that may arise, but it sets out basic principles to guide all employees,
officers, and directors of the Company. All of our employees, officers, and
directors must conduct themselves accordingly and seek to avoid even the
appearance of improper behavior. This Code may also be provided to the Company's
agents and representatives, including consultants, who are expected to follow
the same basic principles when providing services for the Company.
The Company's Board of Directors is responsible for setting the
standards of business conduct contained in this Code and updating these
standards as it deems appropriate to reflect changes in the legal and regulatory
framework applicable to the Company, the business practices within the Company's
industry, the Company's own business practices, and the prevailing ethical
standards of the communities in which the Company operates. While the Company's
Chief Executive Officer will oversee the procedures designed to implement this
Code to ensure that they are operating effectively, it is the individual
responsibility of each director, officer, and employee of the Company to comply
with this Code. Each director, officer, and employee is expected to read and
become familiar with the ethical standards described in this Code and may be
required, from time to time, to affirm in writing his or her agreement to adhere
to such standards.
If a law conflicts with a policy in this Code, you must comply with the
law; however, if a local custom or policy conflicts with this Code, you must
comply with the Code. If you have any questions about these conflicts, you
should ask your supervisor how to handle the situation.
Those who violate the standards in this Code will be subject to
disciplinary action. If you are in a situation which you believe may violate or
lead to a violation of this Code, follow the guidelines described in Section 14
of this Code.
1. Compliance with Laws, Rules and Regulations
Obeying the law, both in letter and in spirit, is the foundation on
which this Company's ethical standards are built. The Company expects that all
directors, officers, and employees acting on behalf of the Company will obey the
laws of the cities, states, and countries in which we operate. Although you may
not know the details of these laws, it is important to know enough to determine
when to seek advice from supervisors, managers, or other appropriate advisors.
The Company publishes policies and holds information and training
sessions to promote compliance with applicable laws, rules and regulations.
2. Conflicts of Interest
A "conflict of interest" exists when a person's private interest
interferes in any way with the interests of the Company. A conflict situation
can arise when an employee, officer, or director takes actions or has interests
that may make it difficult to perform his or her Company work objectively and
effectively. Conflicts of interest may also arise when
an employee, officer, or director, or a member of his or her family, receives
improper personal benefits as a result of his or her position in the Company.
Loans to, or guarantees of obligations of, employees and their family members
may create conflicts of interest.
It is almost always a conflict of interest for a Company employee to
work simultaneously for a competitor, customer, or supplier. You are not allowed
to work for a competitor as a consultant or board member. The best policy is to
avoid any direct or indirect business connection with our customers, suppliers,
or competitors, except on the Company's behalf.
Conflicts of interest are prohibited as a matter of Company policy,
except under guidelines approved by the Board of Directors. Conflicts of
interest may not always be clear-cut, so if you have a question, you should
consult with higher levels of management. Any employee, officer, or director who
becomes aware of a conflict or potential conflict should bring it to the
attention of a supervisor, or consult the procedures described in Section 14 of
this Code.
3. Insider Trading
Employees who have access to confidential information are not permitted
to use or share that information for stock trading purposes or for any other
purpose except the conduct of our business. All non-public information about the
Company should be considered confidential information. To use non-public
information for personal financial benefit or to "tip" others who might make an
investment decision on the basis of this information is not only unethical but
also illegal. If you have any questions, please consult the Company's Policy
Statement on Dealing with Company Information, including Inside Information,
Prohibition of Insider Trading and Conflicts of Interest.
4. Corporate Opportunities
Employees, officers, and directors are prohibited from taking for
themselves personally any opportunities that are discovered through the use of
Company property, information, or position, except with the consent of the Board
of Directors. No employee may use Company property, information, or position for
improper personal gain, and no employee may compete with the Company directly or
indirectly. Employees, officers, and directors owe a duty to the Company to
advance its legitimate interests when the opportunity to do so arises.
5. Competition and Fair Dealing
We seek to outperform our competition fairly and honestly. We seek
competitive advantages through superior performance, never through unethical or
illegal business practices. Stealing proprietary information, possessing trade
secret information that was obtained without the owner's consent, or inducing
such disclosures by past or present employees of other companies is prohibited.
Each employee should endeavor to respect the rights of and deal fairly with the
Company's customers, suppliers, competitors, and employees. No employee should
take unfair advantage of anyone through manipulation, concealment, abuse of
privileged information, misrepresentation of material facts, or any other
intentional unfair-dealing practice.
To maintain the Company's valuable reputation, compliance with our
quality processes and safety requirements is essential. In the context of
ethics, quality requires that our products and services be designed and
manufactured to meet our obligations to customers. All inspection and testing
documents must be handled in accordance with all applicable regulations.
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The purpose of business entertainment and gifts in a commercial setting
is to create good will and sound working relationships, not to gain unfair
advantage with customers. No gift or entertainment should ever be offered,
given, provided or accepted by any Company employee, or family member of an
employee, or agent unless it: (1) is not a cash gift, (2) is consistent with
customary business practices, (3) is not excessive in value, (4) cannot be
construed as a bribe or payoff, and (5) does not violate any laws or
regulations. Please discuss with your supervisor any gifts or proposed gifts
that you believe may be, or may appear to be, inappropriate.
6. Discrimination and Harassment
The diversity of the Company's employees is a tremendous asset. We are
firmly committed to providing equal opportunity in all aspects of employment and
will not tolerate any illegal discrimination or harassment or any kind. Examples
include derogatory comments based on racial or ethnic characteristics and
unwelcome sexual advances.
7. Health and Safety
The Company strives to provide each employee with a safe and healthful
work environment. Each employee has the responsibility for maintaining a safe
and healthy workplace for all employees by following safety and health rules and
practices and reporting accidents, injuries, and unsafe equipment, practices, or
conditions.
Violence and threatening behavior are not permitted. Employees should
report to work in condition to perform their duties, free from the influence of
illegal drugs or alcohol. The use of illegal drugs in the workplace will not be
tolerated.
8. Record-Keeping
The Company requires honest and accurate recording and reporting of
information in order to make responsible business decisions. For example, only
the true and actual number of hours worked should be reported.
Many employees regularly use business expense accounts, which must be
documented and recorded accurately. If you are not sure whether a certain
expense is legitimate, ask your supervisor, the CFO, Accounting Manager, or
another member of the Finance/Accounting Department.
All of the Company's books, records, accounts, and financial statements
must be maintained in reasonable detail, must appropriately reflect the
Company's transactions, and must conform both to applicable legal requirements
and to the Company's system of internal controls. The Company's internal
controls system is designed to ensure that the process of gathering and
processing financial data results in the accurate preparation of the Company's
financial statements. It is the Company's policy that no employee may take any
action that is not consistent with those accounting controls.
The Company's outside auditors play a large role in ensuring the
accuracy of our financial statements and their involvement in that process must
not be compromised through conflicts of interest or other improper pressure or
coercion. The provisions of this Code concerning business entertainment of
customers and suppliers also apply to dealings with the Company's independent
registered public accountants. In addition, it is prohibited under federal law
and Company policy to fraudulently influence, coerce, manipulate, or mislead
the Company's independent registered public accountants for the purpose of
rendering the Company's financial statements materially misleading.
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Business records and communications often become public, and we should
avoid exaggeration, derogatory remarks, guesswork, or inappropriate
characterizations of people and companies that can be misunderstood. This
applies equally to e-mail, eRooms, internal memos, and formal reports. Records
should be retained or destroyed according to the Company's record retention
policies, including any specific instructions in the event of any litigation or
governmental investigation affecting the Company.
9. Accurate and Timely Periodic Reports
The Company is committed to providing its stockholders and the
investment community with full, fair, accurate, timely, and understandable
disclosure in its press releases and filings made with the Securities and
Exchange Commission.
The Company must maintain a system of disclosure controls and
procedures that will provide reasonable assurances to management that material
information about the Company is made known to management, particularly during
the periods in which the Company's periodic reports are being prepared. All
employees, officers, and directors are responsible for providing prompt,
accurate, and complete information in connection with implementation of these
procedures and preparation of these reports.
10. Confidentiality; Protection and Proper Use of the Company's Assets
Directors, officers, and employees must maintain the confidentiality of
confidential information entrusted to them by the Company or its suppliers,
customers, or other business partners, except when disclosure is authorized by
the CEO or legally required. Confidential information includes all non-public
information that might be of use to competitors, or harmful to the Company or
its suppliers, customers, or other business partners, if disclosed. It also
includes information that suppliers, customers, and other business partners have
entrusted to us. The obligation to preserve confidential information continues
even after employment or service to the Company ends.
Directors, officers, and employees are personally responsible for
protecting those Company assets that are entrusted to them and for helping to
protect the Company's assets in general. Company equipment should not be used
for non-Company business, though incidental personal use may be permitted.
The obligation of employees, officers, and directors to protect the
Company's assets includes its intellectual property, such as trade secrets,
patents, trademarks, and copyrights, as well as business, marketing, and service
plans, engineering and manufacturing ideas, designs, databases, records, salary
information, and any unpublished financial data and reports. Unauthorized use or
distribution of this information is prohibited.
11. Payments to Government Personnel
The U.S. Foreign Corrupt Practices Act prohibits giving anything of
value, directly or indirectly, to officials of foreign governments or foreign
political candidates in order to obtain or retain business. It is strictly
prohibited to make illegal payments to government officials of any country.
In addition, the U.S. government has a number of laws and regulations
regarding business gratuities which may be accepted by U.S. government
personnel. The promise, offer, or delivery to an official or employee of the
U.S. government of a gift, favor, or other gratuity in violation of these rules
would not only violate Company policy but could also be a criminal offense.
State and local governments, as well as foreign governments, may have similar
rules. The CEO can provide guidance to you in this area.
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12. Waivers of the Code of Business Conduct and Ethics
The provisions of this Code may be waived for directors or executive
officers only by a resolution of the Company's independent directors. The
provisions of this Code may be waived for employees who are not directors or
executive officers by the Company's CEO. Any waiver of this Code granted to an
executive officer or director will be publicly disclosed as required by the
securities exchange or association on which the Company's securities are listed
for trading. Any change in or waiver of this Code for senior financial officers
will be publicly disclosed as required by the Securities and Exchange
Commission.
13. Reporting and Effect of Violations
Directors and officers should report, in person or in writing, any
known or suspected violations of laws, governmental regulations, or this Code to
the CEO. Employees who are not directors or officers are encouraged to report
such violations, initially, to their immediate supervisor. If in doubt about the
best course of action in a particular situation, contact your supervisor. It is
the policy of the Company not to allow any retaliation for reports of misconduct
by others that are made in good faith by directors, officers, or employees.
Allowing retaliation for such reports is a violation of Federal law.
The Supervisor-Cost Estimating of the Company will oversee an
investigation of any reported violations and the implementation of an
appropriate response. All directors, officers, and employees are expected to
cooperate in internal investigations of misconduct.
14. Compliance Procedures
We must all work to ensure prompt and consistent action against
violations of this Code. However, in some situations it is difficult to know
right from wrong. Since we cannot anticipate every situation that will arise, it
is important that we have a way to approach a new question or problem. These are
the steps to keep in mind:
o Make sure you have all the facts. In order to reach the right
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solutions, we must be as fully informed as possible.
o Ask yourself: What, specifically, am I being asked to do? Does it
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seem unethical or improper? This will enable you to focus on the
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specific question you are faced with, and the alternatives you
have. Use your judgment and common sense; if something seems
unethical or improper, it probably is.
o Clarify your responsibility and role. In most situations, there is
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shared responsibility. Are your colleagues informed? It may help
to get others involved and discuss the problem.
o Discuss the problem with your supervisor. This is the basic
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guidance for all situations. In many cases, your supervisor will
be more knowledgeable about the question, and will appreciate
being brought into the decision-making process. Remember that it
is your supervisor's responsibility to help solve problems.
o Seek help from other Company resources. In any case where it may
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not be appropriate to discuss an issue with your supervisor, or
where you do not feel comfortable approaching your supervisor with
your question, you should promptly discuss it with other
appropriate Company resources. If you are concerned about general
compliance matters, you may consult the CEO, or,
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if you prefer to write, address your concerns to the CEO. If you
are concerned about the Company's accounting or financial
reporting practices, you may submit your concerns to the Chairman
of the Audit Committee on a confidential and anonymous basis. You
may obtain the current contact information for the Chairman of the
Audit Committee from the Supervisor-Cost Estimating of the
Company.
o You may report ethical violations in confidence and without fear
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of retaliation. If your situation requires that your identity be
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kept secret, your anonymity will be protected to the fullest
extent possible. The Company does not permit retaliation of any
kind against employees for good faith reports of ethical
violations.
o Always ask first, act later: If you are unsure of what to do in
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any situation, seek guidance before you act.
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15. Protection of Whistleblowers
The Company strives to conduct its business at all times with integrity
and in an ethical manner. The Company has a strong practice of compliance with
all applicable laws, adherence to all contractual requirements, conduct of
ethical Company practices, and observance of Company guidelines. The Company
encourages its employees to report any incident inconsistent with these
guidelines to the Company and specifically avoids discouraging employees from
reporting violations of law to governmental agencies responsible for enforcement
of such laws.
It is the practice of the Company to provide unconditional protection
to employees involved in identifying and reporting incidents of non-compliance
with law, breach of contract requirements, or unethical Company practices. This
employee protection policy is based on the following:
The Company will maintain a reporting process that is intended to
achieve maximum individual or group anonymity. Any employee who becomes aware of
an incident involving non-compliance with law, contractual obligations, ethical
requirements, or Company guidelines should immediately report the incident
(anonymously or otherwise) to the Supervisor-Cost Estimating of the Company.
No employee who reports a possible ethical violation or other violation
of law or statute will be discharged, demoted, suspended, harassed, or
discriminated against in any manner as a result of the employee's reporting of a
possible violation.
Voluntary disclosure by employees of incidents involving non-compliance
with law, contractual obligations, ethical requirements, or Company guidelines
is encouraged.
Any employee who believes he or she has been discriminated against on
the basis of making a voluntary disclosure in accordance with this guideline
should immediately bring the problem to the attention of the Supervisor-Cost
Estimating of the Company.
Any employee who reasonably believes that there has been a material
violation of this Code of Ethics and Business Conduct caused by questionable
accounting or auditing matters has the right to submit a confidential, anonymous
complaint to the Supervisor-Cost Estimating. The complaint should be made in
written form and provide sufficient information so that a reasonable
investigation can be conducted. The complaint should be addressed to the
Supervisor-Cost Estimating of the Company.
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